Strong falls in the Ibex (-1.66%. 9,403 points. It grazes the support of 9,428 points) and in the rest of Europe (-2.5%) as the international situation worsens. There are already over 80 deaths by the Chinese coronavirus and over 2,700 affected. Beyond the human tragedy, it is a fact that this situation is beginning to affect the Chinese economy. At a press conference held this Sunday, Chinese authorities said the disease will continue to be a problem in the near future. The most immediate economic impact is the decrease in the flow of passengers. In an effort to prevent the virus from spreading, the Government has encouraged people to stay at home, has canceled major public events and has restricted travel for tens of millions of people.
- 10.854,400
- -2,22%
The coronavirus already leaves more than 80 dead and more than 2,700 affected. Beyond the human tragedy, it is a fact that this situation is beginning to affect the Chinese economy. At a press conference held this Sunday, Chinese authorities said the disease will continue to be a problem in the near future. The most immediate economic impact is being seen in the decrease in the flow of passengers. In an effort to prevent the virus from spreading, the Government has encouraged people to stay at home, has canceled major public events and has restricted travel for tens of millions of people.
"Although I am not in favor of thinking about the economy and the markets at times like this, it is clear that there will be repercussions. A 28.8% decrease in travel figures clearly shows the seriousness of the situation and we will see many more figures in the coming weeks that could be just as ugly, and even worse, "says Craig Erlam, an Oanda expert.
"Investors are currently responding to the little information they have and we are seeing clear movements towards traditional refuge assets. However, with the vast majority of cases still contained within China, we cannot speak of panic yet" he adds Erlam.
To this situation we add the resurgence of geopolitical tensions. The US embassy in Baghdad has suffered an attack this Sunday night. According to Bloomberg, five Katyusha rockets were fired at the Badgad Fortified Green Zone, one of which directly impacted the US embassy building, Iraqi security sources said. US helicopters have been seen evacuating some staff that were, Al-Sumaria News reported.
In addition, this Monday a new Boeing crash has been known, in this case a model sold to Ariana airline. The apparatus, shot down by the Taliban, has crashed in Afghanistan and 83 people were traveling aboard it. This new terrible accident is causing Boeing, again, to be negatively affected in the stock market.
This whole situation has terribly tensed the market. Within the selective the companies most involved with tourism have been the most punishing. Amadeus has been the most punished with a drop of more than 6% while Meliá and IAG have fallen more than 5% on Monday. But no value is spared, all have closed in negative. In addition, oil yields 2.7% due to the spread of the coronavirus and the fear that it will end up affecting the demand for crude oil. Brent is trading at the close of the European market below 60 dollars a barrel.
To all this news we must add the political updates coming from Italy, where the left has defeated Matteo Salvini in Emilia Romagna. It was hoped that he would win and that, in some way, this triumph would be the starting point to raise early elections in the midst of the crisis that the Italian coalition government is experiencing.
Friendly reminder that this is a week in which the results of the main banks listed in Spain will be known. In addition, there are meetings of the Federal Reserve (Fed) and the Bank of England over the rates and, in the macro level, there will be important data, such as the GDP of the US and the Euro Zone.
The German IFO has been published today. Germany's business climate has deteriorated slightly in January.
Finally, this week we will finally see the long awaited UK's departure from the EU (January 31).
TECHNICAL ANALYSIS
"There was no possible way to start the week worse off after losing the important support we have talked about on numerous occasions in recent weeks: the 9,460 points (bullish hole that until today had been filled, but not closed). And in the end, regardless of rebounds, what we have is a double ceiling of bearish implications with a fall target (minimum theoretical) in the area of 9,250 points, "explains José María Rodríguez, technical analyst at Bolsamania.
"The reality is that we do not have real support until the early December lows at 9,100 points. As if that were not enough, we also have an important daily bearish gap, which may also end up being a weekly ot, at 9,562 points," he clarifies.
"If this does not close, the bias of 'trading' has gone from being lateral to bearish. What seems clear is that the proportional correction / adjustment of the whole rise from the August minimum has begun and a 50% adjustment would lead to price levels close to 9,000-9,050 points, "concludes the expert.
